A dollar saved is a dollar earned.
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This article was written in collaboration with YouTrip. All views expressed in this article are the independent opinion of DollarsAndSense.sg based on our research. DollarsAndSense.sg is not liable for any financial losses that may arise from any transactions and readers are encouraged to do their own due diligence. You can view our full editorial policy.
There are typically two things a company can do to make higher profits. One way is to increase their revenue. The other way is to reduce their cost.
For a company, cost reduction is often associated with carrying a negative connotation that it will affect employees or their work. Such cost-cutting measures could include retrenchment exercises, lower variable bonuses, hiring freezes, smaller marketing budgets, or reduction of some HR perks. This may affect the morale of the team and could lead to higher attrition and subsequently, lower revenue and profits, which defeats the purpose of the cost-cutting measures in the first place.
However, what business owners may not realise is that it’s still possible to cut down on their business costs without having to compromise on anything that they are currently spending on. By simply paying in a more cost-efficient way, companies can reduce their costs and increase their profits.
Many of us would have heard of and used YouTrip, Singapore’s first multi-currency wallet that also includes a pre-paid MasterCard. Launched in 2018, YouTrip allows us, as consumers, to pay in over 150 currencies when we’re shopping online or travelling abroad without incurring currency conversion fees.
With YouTrip, we can also exchange and store 10 different currencies in its multi-currency wallet, making it convenient for online shoppers, holidaymakers and business travellers to lock in competitive rates on-demand. You can read more in our review of YouTrip and how to apply for a card.
While YouTrip is targeted towards consumers, YouBiz has been introduced to serve the needs of business owners.
YouBiz’s general principle is similar to YouTrip’s, and that is to help customers save on their foreign currency conversion fees. This is particularly important for many Singapore companies as they are likely to incur expenses in foreign currencies even when they are solely operating in Singapore.
For example, many companies, including DollarsAndSense will have subscriptions that are priced in USD. For example, this includes our Microsoft, Gmail, Mailchimp and Adobe subscriptions. Normally, subscriptions for these services are priced in USD but charged to our Singapore credit card in Singapore Dollars (SGD).
One of the monthly subscriptions we have at DollarsAndSense costs us 99 USD. However, what we end up paying each month for the subscription varies depending on the spot exchange rate at the point of billing. On 28 June 2022, this was 141.81 SGD.
However, six months ago on 28 December 2021, the exact same subscription cost us 139.32 SGD, 2.49 SGD less compared to today due to a more favorable USD/SGD rate then.
For YouBiz, the advantage businesses can enjoy is that when we see a favorable foreign currency exchange rate that we like, we can convert and lock in the rates that we want today in our YouBiz multi-currency account, knowing that we can use them for the future. This also transforms what would have been a variable cost into a fixed cost.
With YouBiz, we get a free multi-currency account that allows us to hold 9 different currencies including SGD and USD in our account. We can also receive fund transfers into our YouBiz account in 8 different major currencies and spend in over 150 different currencies with cards linked to an SGD account.
While being able to lock-in favorable rates in advance is good, we also want to ensure that we enjoy the best possible conversion rates without any markups. This is why many consumers will spend time comparing and going to different money changers to find the best possible exchange rates.
Here is some good news. Similar to YouTrip, YouBiz doesn’t charge any currency conversion fees. This is unlike traditional moneychangers and financial institutions, where currency conversion fees and foreign exchange spread are how they make money.
For example, on 5 August, at the time we did the screengrab, we see that the spot rate for USD/SGD is 1.3759. This means that for every 100 USD, we need to change 137.59 SGD.
The USD/SGD rate offered by YouBiz on that day was similar – 1.3782.
In other words, YouBiz offers businesses the ability to exchange at the spot rate (some call it the “Google Rate”), without any currency conversion cost or spread.
We used the conversion fee we paid on 28 June 2022 to determine how much more we typically pay on foreign currency conversion with a regular credit card.The exchange rate above works out to be 1.43.
However, if we were to look at the spot rate on 28 June 2022, we can see that the rate on that day was about 1.39. This means that the exchange rate we got when paying with our regular bank credit card was about 2.8% more than the actual spot rate on that day.
2.8% may not seem like a lot if we are just paying just 99 USD a month, but for many companies, the various subscriptions and services we pay for (Microsoft, Gmail, Adobe, Mailchimp, Server Cost, Digital Marketing Spend) can easily be about 5,000 USD or more each month.
So, if we are paying on average about 2.8% more than what we need to, this works out to be an extra cost of about 1,680 SGD a year that we didn’t need to be paying for.
Besides enjoying a favorable exchange rate at any time with no additional fees, YouBiz also rewards businesses when they pay using the YouBiz Card. This comes in the form of a 1% cashback with no cashback cap, minimum spend required or FX fees.
Using the example of a company that spends about 5,000 USD each month, this equates to a cashback of 50 USD a month, or 600 USD a year. When you add this amount to what we would have also saved in foreign currency conversion fees, this adds up to 2,514 SGD a year (assuming a USD/SGD conversion rate of 1.39).
All YouBiz users can issue unlimited virtual/physical cards to their employees with customisable spend limits at no extra charge. The person who applies would be the Admin, and this person can view and manage everything. You can also give custom access with varying permissions and payment access to other employees, which can be controlled by the Admin.
The spending made on all cards will automatically enjoy cashback benefit that is credited back to the company.
As mentioned above, YouBiz allows us to lock-in and enjoy favorable exchange rates when we convert our SGD to the foreign currencies that we need.
For Singapore companies with overseas business operations, this is valuable. Our overseas operations usually represent a variable cost component for us as a Singapore-based company because the foreign currency exchange rate will ultimately determine the cost of our overseas operations.
With YouBiz, what we can do is lock in rates when they are favorable for us. For example, if we are paying our employees in USD, we can convert our SGD to USD today if we like the exchange rates and keep the USD funds in our YouBiz account.
From a cashflow management point of view, this is good because it gives us better predictability for the cost of our overseas operations, as opposed to having to worry and accept the spot rate when we must pay our overseas employees.
When it’s time to pay our employees, we can send funds overseas from our YouBiz account and remit money using the Send Money tab.
The key value proposition that YouBiz offers is that it can help businesses significantly reduce their foreign currency spend, whether they are paying for expenses denominated in foreign currencies or the salaries of our overseas employees. On top of that, the 1% cashback rebate is another perk that can help businesses reduce their expenses on both SGD and foreign currency spend, without having to compromise on what they are spending on.
YouBiz is completely free to use, with no annual fees or minimum cash balance required. There are also no charges if you need more YouBiz cards for your growing team of employees. Overseas staff that you entrust with handling expenses can also be issued with a YouBiz card while you or your finance manager can keep tabs easily from Singapore on the various types of spend being incurred.
Read Also: YouTrip Vs Regular Credit Card: How Much Can You Save When Spending Overseas?
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